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*** Ask TaxMama Volume 7, Issue #331 October 21, 2005 ***
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http://taxmama.com/taxcalendar.html

11.01.2005    3rd Quarter Payroll & Sales Taxes Due
12.31.2005    Last Day to Open KEOGH account for 2005 deposits  
01.15.2006    4th Estimated Payment for 2005 

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JOB OF THE WEEK visit the NEW   http://taxmama.careerbank.com
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All hail to the Chief - CFO, that is - for Ohio Central Savings
Live in Columbus, OH, and get your hands on lots of dough.
http://taxmama.careerbank.com/job.cfm/226272.htm

Take the new 2005 Salary Survey
http://www.careerbank.com/resource/ssurvey/salary_survey.cfm

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Dear Family,


Well, we survived another tax season, with only a
few returns left to do...OK, a couple are in the
hurricane zone. But, others...we still haven't gotten
the rest of their data, so we can't complete their tax
returns. See, that's the kind of behavior that makes
a TaxMama turn grey. (Thank goodness for a great
hairdresser!)

And of course, even with tax season more or less over,
I find myself burning the candle...staying up into the
wee hours of the night firing off challenges to IRS.

Well, they asked me to!

Seriously, it's a wonderful system. After IRS gives
their annual licensing exam for Enrolled Agents,
http://irsexam.com/career.php

we get to read the questions and answers used in the
exam and send IRS notes suggesting that they accept
more than one answer, throw out the question or
accept all answers.

And I wasn't the only one still up. Some of my
students were up even later, sending in their own
challenges. For those interested - the deadline
is Sunday night, October 23, 2005.

The form is here:
http://www.irs.gov/taxpros/agents/article/0,,id=100711,00.html

Each year, this ritual helps all those people
whose exam scores were just short of passing
on one or two parts of the exam. If we're
convincing enough, IRS will change their scores.

What a country!

Still a very busy day. Got to run. More next week.

Best wishes,

Eva Rosenberg, EA
Your TaxMama is watching...out for you.

P.S. If you're in business, you MUST read
Small Business Taxes Made Easy
http://www.taxmama.com/AskTaxMama/book/

P.S.S. NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
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Or create your own custom postage - join CafePress
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**************************************************
To comment on any articles in this issue, please,
DON'T send me back the whole issue. Send a note to
mailto:taxmama@taxmama.com?subject=AskTaxMamaComment

**************************************************

ADDRESS CHANGES - Please, do NOT send them to me to do.
There is a link at the bottom of this issue. Please click
on it and you will be able to make updates and changes
yourself. And faster.

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---==========**********O**********==========------

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Media Tour and Classes
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Did you miss this the last webinar?

How to Run Your Business Instead of Letting it Run You.
With Jacqueline Freeman of http://josephfreeman.com

Listen here http://taxmama.com/workshops/

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If you're flying Southwest Airlines this month,
be sure to read their Spirit Magazine.

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IRS POSTED THE UNOFFICIAL ANSWERS
http://www.irs.gov/pub/irs-utl/2005_unofficial_answer.pdf

And for challenges
http://www.irs.gov/taxpros/agents/article/0,,id=100711,00.html

If you didn't pass, it's time to study:

EA Exam Review Class - Self-Study

Get an early start!
Especially if you still need to learn
about income taxes in the first place.

http://irsexam.com/register.php

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                 USE THESE QUICKIE RESOURCES!
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        101 WAYS TO BE YOUR BEST  
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Small Business Taxes Made Easy
http://asktaxmama.com/go/autographed
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Tiger Direct's sale on hard drives
My husband's favorite place to shop online
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This Week's Tax Quips
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NEW - IMPROVED SOUND!
It's so WOW that one of the top podcasters on
the planet wanted to know how I got that
amazing sound quality. (I'll tell you next
week.)
 
If you haven't subscribed yet, you're not just
missing some juicy tips and tax news.

Sign up for the Internet's NUMBER ONE tax podcast
http://www.taxmama.com/taxquips/

Listen to this weeks pearls of wisdom are at:
http://www.asktaxmama.com/podcast/


MONDAY - UGMA Accounts
http://www.asktaxmama.com/podcast/index.php?id=81

TUESDAY - Separate Funds
http://www.asktaxmama.com/podcast/index.php?id=82

WEDNESDAY - Loan or Wages
http://www.asktaxmama.com/podcast/index.php?id=83

THURSDAY - Real Estate Biz
http://www.asktaxmama.com/podcast/index.php?id=84

FRIDAY - West-Meets East
http://www.asktaxmama.com/podcast/index.php?id=85

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License to Ad
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From: Thousand Oaks, CA


Dear TaxMama,

I am starting my own website business. I don't sell Items
just ad space on my web site.

My question is - Do I need a busines license to operate
this business and to claim dectuctions for the expenses
on my tax return.

Mary Ann


<TaxMama Replies>

Dear MaryAnn,

You'll need to check with your city, the
City of Thousand Oaks.

You're a business. So, if businesses are required
to be licensed in 1000 Oaks, so do you.

And since you're working from home, you'll also
need to see if there are any special provisions for
people whose business is at home.

Best wishes,

Eva Rosenberg, MBA, EA

NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
http://www.cafepress.com/taxmama.28979465


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Overwhelmed With Debt
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From: Ohio

Dear TaxMama,

I have over $15,000 in back taxes from not filing
previous tax returns on time - and my husband not
withholding enough.

We are current with our tax filing, but my husband
has been unemployed for the last two years.

The IRS has a tax lien on my house, which they have
put in hardship status.

I have tried to get refianced but get turned downed
everytime. 

My credit is poor and I am in consumer credit counseling
service to repay my creditors.  I have a total of $17,000
in personal debt, a $48,000 mortgage with 11/25% interest,
and $12,000 in outstanding tax liens. 

I'm at my wits end because I'm coming up short because
a creditor (an attorney) will not accept the CCCS plan
and is garanishing my wages of $600 a month.

I don't want to file bankruptcy but I feel I have not
other recourse.  Please advise. 

Thank you for your time.

Tina

<TaxMama Replies>


Dear Tina,

Ouch. Clearly, you're having a hard time
sleeping at night.

Pity about the bankruptcy. Today, the new law
comes into play, where you have to go through
the longer-term bankruptcy. You've just missed the
quick option.

OK, so, you're overwhelmed. But your house has
equity - you just can't refinance it with all
the problems.

Here's what I would do to avoid filing bankruptcy.

Find a friend or family member with good credit.
Sell them your house.

Draw up a lease on your home, with option to buy
the house back within 5-10 years at today's prices,
plus all the buying and selling costs incurred by
your friend + something for their time and inconvenience.

Make sure your lease if for a rent  payment that's enough
to cover the new mortgage, the taxes and the insurance.
Be sure that the new insurance policy naming your friend
(the new owner) also names your family as the additional
insureds.

Selling it with the lease will give you protection in case
your friend suddenly decides to own your home. And
selling it to them, instead of having them co-sign for you,
gives your friend protection against you ruining their credit.

That way, you'll get enough money out to pay all your debts.
You'll get a lower interest rate mortgage.
And you'll buy yourself enough time to get back on your feet.

You already know how much easier it all can be when
you're not beaten down by creditors constantly calling
or embarrassing you at work with garnishments.

Good luck. You need a fresh start!

Best wishes,

Eva Rosenberg, MBA, EA

http://www.TaxMama.com

Subscribe to the daily podcast - TaxMama's TaxQuips
http://www.asktaxmama.com/podcast/


Note: It's working. She has a sibling who's
starting to buy rental real estate anyway.
Tina can be her first residental tenant.

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Skipped a Creditor
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From: Montana

Dear TaxMama,

If I have gone through Chapter 7 bankruptcy and
later found that I neglected to list one of my
creditors, is it possible to get this debt
discharged?

Or am I obligated to pay it?


Larry


<TaxMama Replies>

Dear Larry,

The whole purpose of listing creditors
in a bankruptcy is to give them time to
file a claim against your assets.

If you had no assets whatsoever, or those
creditors with liens would have eaten up all
the assets you did have, perhaps you can
get the bankruptcy court to include that creditor.

But you'll need to pay your attorney to arrange that.
Is that cheaper than paying the creditor?

However, if there were assets distributed to
unsecured creditors, this creditor would have been
entitled to a share of those assets. I doubt the court
would let you add this creditor after the fact.

But, that's all based on logic, not knowledge of
bankruptcy law. Remember, TaxMama knows
tax law. Bankruptcies are a whole other area.

So, go call your bankruptcy attorneys and ask them!

Best wishes,

Eva Rosenberg, MBA, EA

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Because We Care
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To help or to get help:

First.gov - http://go.asktaxmama.com/KatrinaRecovery
FEMA  - http://www.fema.gov/news/newsrelease.fema?id=18473

==========

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MONEY FUNNIES
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The Prawns 


Far away in the tropical waters of the Caribbean, two
prawns were swimming around in the sea - one named Justin
and the other named Christian. The prawns were constantly
being harassed and threatened by sharks that inhabited
the area. Finally one day Justin said to Christian, "I'm
fed up with being a prawn. I wish I was a shark, then I
wouldn't have any worries about being eaten."

A large mysterious cod appeared and said, "Your wish is
granted", and lo and behold, Justin turned into a shark.
Horrified, Christian immediately swam away, afraid of
being eaten by his old mate.

Time passed (as it invariably does) and Justin found life
as a shark boring and lonely. All his old mates simply
swam away whenever he came close to them. Justin realized t
hat his new menacing appearance was the cause of his sad
plight.

While swimming alone one day he saw the mysterious cod
again and he thought perhaps the mysterious fish could
change him back into a prawn. He approached the cod and
begged to be changed back, and, lo and behold, he found
himself turned back into a prawn. With tears of joy in
his tinylittle eyes Justin swam back to his friends and
bought them all a drink.

Looking around the gathering at the reef he realized he
couldn't see his old pal. "Where's Christian?" he asked.
"He's at home, still distraught that his best friend
changed sides to the enemy and became a shark",
came the reply.

Eager to put things right again and end the mutual pain
and torture, he set off to Christian's abode. As he
opened the coral gate memories came flooding back. He
banged on the door and shouted, "It's me, Justin, your
old friend, come out and see me again"

Christian replied, "No way man, you'll eat me. You're
now a shark, the enemy, and I'll not be tricked into
being your dinner. "

Justin cried back "No, I'm not. That was the old me.
I've changed."................






"I've found Cod. I'm a prawn again, Christian."

------

Contributed by Joyce Ragels, EA in Arizona

[Remember, we're always looking for SHORT, clean humor!]

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IRS and Tax NEWS
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Courtesy of The Mellems

2006 Pension Plan Limitations Announced

IRS has released New Release IR 2006-120 which
contains the cost of living adjustments for the dollar
limitations on benefits and contributions under
various qualified pension plans for 2006.  Below are
some of the more common amounts.

The defined benefit plan limitation increases from
$170,000 in 2005 to $175,000 for 2006.  The defined
contribution plan maximum increases from $42,000 to
$44,000.

The annual compensation limit increases from $210,000
to $220,000.

A year of service for SEP coverage stays at $450 of
earnings.

Prior law changes that are effective for 2006 include:
Elective Deferrals from $14,000 to $15,000, with
catch-up increasing from $4,000 to $5,000.

Deferrals to SIMPLE remain at $10,000, with catch-up
increasing from $2,000 to $2,500.

The release also has the other pension related indexed
amounts such as key employee, top heavy, and �control
employee� limits.

A copy of this news release can be found at
http://www.irs.gov/newsroom/article/0,,id=149631,00.html


This text has been shared with you courtesy of: David
& Mary Mellem, EAs & Ashwaubenon Tax Professionals,
920-496-1065 (fax 920-496-9111) davidmellem@yahoo.com,
marymellemea@yahoo.com, davidmellemea@yahoo.com, and
marymellem@yahoo.com


�2005 Ashwaubenon Tax Professionals.  No reproduction
of this article is permitted without the express
consent of Ashwaubenon Tax Professionals, 2140
Holmgren Way, Suite 1040, Green Bay, WI 54304.


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CAREER CENTER   http://taxmama.careerbank.com/
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This is the best tim to hire and train staff.
TaxMama's Career Center provides you with the
best tools for finding employees in our industry.
http://taxmama.careerbank.com/

Explore the center today and take advantage of its
exclusive tools including job postings and resume
searches.  As a member of the leading online career
center network for banking, finance and accounting
professionals, you can post your job on our Career
Center once and it will automatically be seen on
90+ accounting, finance and banking organization
career centers.   Visit the TaxMama's CareerBank 
http://taxmama.careerbank.com/

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TaxMama On the WWW & Tooting Her Own Horn
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Critical Dates http://taxmama.com/taxcalendar.html
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Ask TaxMama is published by the good folks at http://taxmama.com
ISSN 15320790 � copyright, Eva Rosenberg, 1999 - 2005
TaxAnxiety Inc. P.O. Box 280549, Northridge, CA 91328
Written (e-mail) permission is required to copy or redistribute this
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